The Marketing Concept: Profitability, The Key Measure of Success in Marketing
Marketers are often singularly focused on market share.
Their goal is to deliver a message that attracts more customers.
Yet this view is too narrow.
Brian Till (Principal at Brand Cartography Group) coined “The Marketing Concept,” a 3 part recipe for successful, practical and profitable marketing design and execution. The three pillars of The Marketing Concept are:
- Focus on PROFITABILITY as the Key Measure of Success
- Understanding customer needs & meeting them, maybe.
- Integrated or Centralized Control of the Marketing Mix
Let’s dig into each of these.
1. Focus on PROFITABILITY as the Key Measure of Success
It’s easy to think of reasons why profitability shouldn’t be the key measure of success. Shouldn’t great customer service and powerful branding lead to profitability? Maybe, maybe not. Profit is the scorecard. Bottom line.
I’ve seen firsthand why profitability should be the KEY measure of success. Without profitability, you’re done. Everybody should expect to go through some patches and of course business is all about taking calculated risks. But there has to be a focus on a timeline to achieving sustainable profitability. Buying market share at unprofitable levels, or extending yourself into territory that erodes your overall company profits is potentially a huge disaster.
2. Understanding Customer Needs & Meeting Them, Maybe.
Fulfilling a need is the key component of business. But do you have to fulfill all of your potential customer’s needs? Is the customer always right? The answer is clearly no.
What if your customer wants a 50% discount, just because? How long can you fulfill that need? Not long. This is an extreme example, but it clearly shows that you have to draw the line between fulfilling a need profitably and giving in to unreasonable customer demands that fall outside of your business model. Unfortunately some businesses take this approach too rigidly, never compromising with a customer and losing long term value. That can be just as damaging. At the end of the day, you should be meeting those needs that enhance profits.
3. Integrated or Centralized Control of the Marketing Mix
In a nutshell, this means that one person or team oversees decisions to ensure that your marketing tools are working in unison. The marketing mix includes:
- Place (distribution)
Some will debate whether the marketing mix should also include a fifth “P” or even seven P’s. For our purposes, we don’t care. Whether you identify with the 4 P’s of marketing or you subscribe to 17 P’s, make sure that each of them is being centrally overseen. It’s critical that the ultimate decisions around these components of your brand be made by one person or team to deliver an effective, clear message.
If the elements of your marketing mix aren’t working in unison, your efforts could be significantly damaged in the marketplace. This is guaranteed to have a negative impact on profitability.
What do you think? How have you seen these principles play out in your company or career? Would you agree that profitability has to be the key measure of marketing success?
Brian Till is the author of “The Truth About Brands People Love” and a Principal with Brand Cartography Group.
Gateway CFO Solutions helps small businesses grow profits and revenues, and bring peace of mind to their company’s financial picture through free resources, tools and expertise.